The Difference Between Uncertainty And Chaos

01/30/2017 02:46 EST | Updated 01/30/2017 02:46 EST

Not long ago I was talking with my friend Paul about the changes occurring globally within the the energy industries. We talked about what was causing the stubbornly low oil and gas prices, changing government policies regarding fossil fuels and the rise of renewable and alternative energy, the changes in electricity generation and distribution, the growing and legitimate concern over climate change, and a number of other related topics.

At one point I told him that I was struggling to understand all the uncertainty so that I could identify the business opportunities. "After all," I said "with uncertainty comes opportunity."

Paul, who has more years experience than me working in the energy industry and has boundless perspicacity, looked at me, shook his head slightly and said, "Yes Mel, but remember: there is uncertainty and then there is chaos. And right now in many parts of the world the energy industry is in chaos."

I hadn't heard or thought about the distinction between uncertainty and chaos before, so I asked him to explain. He said "well, with uncertainty you can step back and see the patterns and trends, assess the probabilities of certain events occurring, evaluate the risks, and capitalize on the opportunities. But with chaos you can't. It's just chaos."

Wow. His comments hit home. His words explained why, when discussing the energy industry -- an industry I have worked with for well over twenty years -- I often feel lost in whirlpool of investor angst, stakeholder pressure and inter-governmental wrangling. It helped explain why I had a chronic case of data fatigue (so many studies! so many interpretations! so many conflicting recommendations!), acute policy whiplash, and a growing hunger for some kind of clarity, direction, and decision. It's like being on a playground roundabout that keeps changing speeds but never actually stops. I am sure many others in the industry feel the same.

That said, I have no doubt the feelings of chaos and anxiety are not limited to just the energy industry. Many industries are going through similar changes and some are going through outright disruption. Consider the automotive industry and the emergence of electric self driving cars, the music industry and the success of iTunes, the movie and television industry and the expansion of Netflix, just to name a few. Few industries can say they are immune from change and the occasional bouts of chaos. Why should the energy industry be any different?

"But" you may say, "in today's world, people need energy. We cannot do without it". True, but in today's world people also cannot do without knowledge, but that doesn't mean people are still buying hardcopy encyclopedias. Just ask the folks at Encyclopedia Brittanica who printed their first volume in 1768 and switched totally to digital in 2011.

Times change and industries change. Sometimes the change is slow, sometimes it is fast and furious. Sometimes it is evolutionary, sometimes it is revolutionary. Sometimes you can see the changes and predict the outcomes, sometimes you can't. Welcome to the business world. Or more accurately, welcome to the world, period.

So what are the key takeaways here?

Well, first: there is a difference between uncertainty and chaos. Learn to recognize the difference. With uncertainty comes opportunity because you can assess probabilities and evaluate risks, much like any type of investment. But with chaos, opportunities are fleeting and it is very difficult, if not impossible, to assess probabilities and risks. You can invest in opportunities during chaos, but keep in mind you will be taking a very large risk.

Secondly, in a time of chaos often the best approach to seizing business opportunities is to wait until the dust starts to settle. If you wait, you will still have uncertainties, but you will at least see some patterns and trends and be able to evaluate the risks. If you are the first to see the opportunities and capitalize on them, congratulations. Waiting for the dust to settle does not suggest a lack courage; in fact, it means you have the discipline and patience to wait and take a more calculated risk. And in business discipline and patience are assets, not liabilities.

Special thanks to my friend Paul Vickers for the inspiration for this blog.

Follow HuffPost Canada Blogs on Facebook